On Wednesday, a U.S. survey showed manufacturing had contracted, possibly boosting chances of another U.S. interest rate cut.

The dollar continued to fall against the euro. The 15-nation currency was worth $1.4744 in late New York trading, compared to $1.4726 Wednesday.

Friday's jobs report for December is seen by investors as an important gauge of the U.S. job market and the country's economic strength heading into the new year.

The Institute for Supply Management, a private research group in Arizona, said Wednesday that its manufacturing index registered 47.7 last month, down 3.1 percentage points from the 50.8 recorded in November.

The dollar fell to 109.33 Japanese yen from 109.43 yen late Wednesday, but rose against the British pound. The pound was worth $1.9732 Thursday, down from $1.9802 Wednesday, as it tumbled to year lows against the yen and a record low against the euro.

The dollar has been buffeted by worries over the health of the U.S. economy and three interest rate cuts by the U.S. Federal Reserve, which is trying to reduce borrowing costs to revive the nation's battered housing market. Investors think another rate cut may be on the way.

Lower interest rates can jump-start a country's economy, but may weigh on the currency as traders look to invest in higher-yielding assets.

Some analysts are not convinced of the need to continue cutting rates, however.

"In the grand scheme of things we still beg to differ over the need for ongoing monetary stimulus," Andrew Wilkinson of Interactive Brokers Group LLC said in an e-mail. "The housing meltdown indeed needs to work its way through the bowels of the economy and we're not at all convinced that by reducing interest rates, the Fed will initiate greater lending appetite by the nation's banking system."